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Recap of Last Weekend, October 20:Don’t Panic! Profit From Stock Selloff!

This past week’s Bulls & Bears:

• Gary B. Smith, Exemplar Capital managing partner

• Pat Dorsey, Morningstar.com director of stock research

• Scott Bleier, HybridInvestors.com president

• Tobin Smith, ChangeWave Research editor

• Bob Olstein, The Olstein Funds president

• Marc Lamont Hill, Temple University professor

Trading Pit

Stocks take a dive 20 years to the day of "Black Monday"… The day the Dow had it's worst crash ever. But as then, a frightening fall may be just what Wall Street needs -will stocks soar?

TOBIN: Bull markets are higher highs and higher lows. If you look at the bottom here, technology stocks are still in the green, so this progression is still going on. You want to be buying these strong technology stocks. But if we do get this pull back, it’s natural; it’s what bull markets do.

SCOTT: The financial stocks that have lead this market for five years are acting horribly. Technology stocks have taken over the market leadership. We haven’t made a higher high; we’ve technically made a double top. There is earnings deceleration, which means earnings are going down, and that is not a good thing for the bull market.

PAT: The big run the past several years have been risky financials, lots of sub-prime mortgaging, and some very small banks, which are still kind of expensive. But the big banks, the blue chips, the Wachovia’s and Wells Fargo’s, they’ve been stiff for three or four years, and are very cheap right now. My shopping list is out right now. The only wildcard is consumer spending; we have good employment numbers, good wage growth on one hand, and a negative housing market on the other hand. It’s a wildcard, it’s out there, it’s nothing to panic about but it is something to watch.

BOB: We’ve been buying (unsuccessfully) in the last couple of weeks. But we’re finding values in the financials. In the consumer discretionary we’re concerned about consumer spending. It’s in the prices of the stocks. If you look at the market, interest rates are significantly lower than they’ve been in the past six or seven years. Stocks are cheap and we’re looking for bargains.